When a investor invests his money in debenture or bonds , then it is very necessary to check the quality of debenture or bonds which are issued from different companies . In USA , there aremany credit rating agencies like Standard & poor and others which gives rank and rating different companies bonds according to their quality . In India , Care Rating agency which is recognised from SEBI gives rate to Indian companies bonds and debentures .
Triple A ( AAA ) means best quality bonds
If any bond gets the rate of AAA , it means , the company who issues the bond is good for repayment lender's debt on time and there is no risk of bad debts . In other words many of them are govt. agencies or companies who have issued the bonds .
Rating agency can give also other rate like double A ( AA ) or single A , if they found bit higher risk and economic situation can affect finance and if bonds are not best quality or medium quality , then bonds can also get BBB to B rate .
